Pete Ryan
Economists refer to opportunity costs, neuroscientists to metabolic costs, and cognitive psychologists to computational costs—all of which are types of cognitive costs, the mental effort and resources required to make a decision or perform a task. If the cost of a decision is too high, we may choose to abandon it, or to put in less effort and potentially make a worse choice.
That cognitive costs appear in so many scientific disciplines reflects their importance to the study of decision-making. Yet, because each field typically sticks to its own corner of study, it’s difficult to understand cognitive costs comprehensively.
An interdisciplinary team of 15 researchers that includes Chicago Booth’s Daniel Bartels and Booth postdoctoral scholar Jake R. Embrey sought to address this disconnect by establishing a cognitive timeline—a framework that all researchers and policymakers can use to see when the various types of cognitive costs pop up in the decision-making process.
The team, which also includes University of Illinois at Chicago’s Alexander K. Moore, a recent graduate of Booth’s PhD program, came together after its members realized that cognitive costs and the ways that people try to avoid them pervade all their research. Pooling their experience, they could see that cognitive costs could be broken down into a timeline stretching from before a decision to after it. They identified six types of costs incurred over three phases:
- Before the decision: Entry costs, representation costs, and metacognitive costs
- During the decision: Algorithmic costs and opportunity costs
- After the decision: Remembered costs
A timeline of cognitive costs in decision making
To illustrate how costs change over the course of a decision, the researchers use the example of someone thinking about buying a new phone.
Your decision-making capacity reflects finite resources, including mental resources. Every step in the decision process carries costs (such as the use of these mental resources) and benefits (the positive outcome of the choice), and there’s a possibility that the costs of a decision outweigh the potential benefits. If that happens, you may simply bow out. “A person might go, ‘This is too burdensome for me. I’m going to stop making this decision altogether,’” Embrey says.
To demonstrate each of the costs on the timeline, the researchers describe someone thinking about buying a new phone. Entry costs crop up immediately as the person deliberates on whether they should make the purchase at all. Next come representational costs, or the work of framing the problem: I need a new phone; which one should I get? Then metacognitive costs come in: They involve choosing a decision-making strategy—for example, evaluating different types of phones or asking for a recommendation from a tech-savvy friend. Algorithmic costs, or the costs of implementing the strategy, and opportunity costs, when the person considers whether that implementation was unpleasant and what else they might have done with their time and energy, follow. Finally, after the decision has been made, the person may evaluate their decision-making process and its outcome in the context of all the earlier costs, which become remembered costs that are stored for future decision-making.
Some decisions won’t include every cognitive cost. But the more complex a decision becomes, the more of these costs emerge, and the more likely they are to get in the way of making good choices and progress on goals. Having a reference point that applies across disciplines could help researchers and policymakers find ways to reduce them, potentially helping people to make more careful decisions.
Christin Schulze, Ada Aka, Daniel Bartels, Stefan F. Bucher, Jake R. Embrey, Todd M. Gureckis, Gerald Häubl, Mark K. Ho, Ian Krajbich, Alexander K. Moore, Gabriele Oettingen, Joan D. K. Ongchoco, Ryan Oprea, Nicholas Reinholtz, and Ben R. Newell, “A Timeline of Cognitive Costs in Decision-Making,” Trends in Cognitive Sciences, May 2025.
Your Privacy
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.